Medicines innovation in severe mental illness: the next investment desert?

Eurohealth INTERNATIONAL Eurohealth incorporating Euro Observer — Vol.18 | No.4 | 2012 24 MEDICINES INNOVATION IN SEVERE MENTAL ILLNESS – THE NEXT INVESTMENT DESERT? By: David J. Nutt and Jim Attridge Summary: The societal burden of mental illness in Europe exceeds that of either cancers or cardiovascular diseases. Depression, anxiety and schizophrenia seriously impact upon the working age population and labour productivity. Despite past progress in developing effective medicines, many patients still do not respond and there are high levels of unmet need. Emerging basic science and product development technologies suggest that much scope exists for further incremental innovations. However in Europe, the ‘new economics’ of biopharmaceutical innovation and intense pressure on health budgets are driving a substantial decline in rewards for innovators. Unless more is done to protect funding of purchases of innovative medicines in this disease sector, the decline in investment will continue, creating another innovation desert analogous to that already seen for antibiotics. Keywords: Medicines, Severe Mental Illness, Innovation Incentives David J. Nutt is Professor of Neuropsychopharmacology, Imperial College, London, UK and Vice-President of the European Brain Council. Jim Attridge is a Visiting Research Fellow in The Business School, Imperial College, London, UK. Email: jimattridge@aol.com Gustavsson et al. estimated in 2010 that the cost of mental illness in Europe was €798 billion, consisting of 37% direct health care costs, 23% direct non- medical costs and 40% indirect costs and productivity losses. 1 The EU per capita cost of brain disorders on average was €1,550. This paper is limited primarily to depression, anxiety and schizophrenia, which constitute a substantial part of this cost and there is a growing literature showing the high negative impact of these illnesses upon labour productivity. Enormous progress has been made in clinical models of severe mental illnesses and biochemical brain mechanisms, leading to the development of effective new drug treatments. However, investment in research and development (R&D) in better drugs for these conditions in Europe is weakening. 2 This article reviews past progress and offers a prognosis of exciting scientific advances confronted with growing short-termism in rewarding innovation, driven by economic austerity. Innovation models for medicines in severe mental illnesses The balance between static and dynamic competition determines the incentives to invest in R&D; government regulation of markets sets this balance by providing ‘economic shelters’, such as patents. Biopharmaceutical innovation involves three competitive races: Eurohealth INTERNATIONAL Eurohealth incorporating Euro Observer — Vol.18 | No.4 | 2012 25 The Research Race to discover new disease mechanisms and novel patentable agents for modifying them. The Development Race to convert the patent knowledge into safe and effective products. The Market Diffusion Race to bring these products into general use to benefit both patients and reward the innovators. Innovation theories distinguish between radical innovations and incremental ones. The first to market of a new class of treatment appears to be a radical innovation and follow-on products are ‘incremental’ followers, but it may be one of these later entrants that offers the best treatment. This analysis reaffirms the reality that in practice innovation is an incremental process and that classification of medicines as either ‘breakthrough’ or ‘me-too’ is a gross and unhelpful distortion. Progress in medicines for serious mental illnesses Up until the 1970s, concepts of disease states were vague, the numbers of people living with them greatly underestimated, and there were few treatments. Furthermore, those whose condition deteriorated, or experienced psychotic conditions, were incarcerated, sometimes for life. Innovative progress in three domains – clinical research, laboratory studies and development of new classes of medicines, in conjunction with more widespread availability of psychotherapeutic interventions, has transformed outcomes. Effective therapy for depression began with the monoamine oxidase inhibitors, which have serious side effects. Later the tricyclic class of antidepressants (TCAs) were developed which had much improved activity to side effect profiles. However, individual patient responses varied greatly and many did not respond at all. Better definitions of disease states led to more accurate diagnoses and the selective deployment of this new choice of therapies. The selective serotonin reuptake inhibitors (SSRIs) which followed were both highly effective and safe and became established as the first line treatments for depression. Given they are exceptionally safe in overdose, SSRIs are preferred to the TCAs in the treatment of patients with suicidal tendencies. Later clinical studies of manic and depressive episodes led to the definition of the new diagnostic sub-class of ‘bipolar disorders’. 3 Anxiety is a normal emotion, but when excessive, inappropriate or prolonged it can cause profound distress and functional impairment. The benzodiazepines, discovered in the 1960s, were the first effective anti-anxiety agents and research on them continues even today. Not all novel structural types blossom into successful drug families. The novel partial agonist buspirone has value in treating patients with general anxiety disorders, but substantial investment failed to find more selective analogues. The phenothiazine class of medicines were the first effective antipsychotic agents, but they cause ‘Parkinsonian-like’ side effects. Clozapine was patented in 1963, but it was twenty years later, when its exceptional efficacy in schizophrenia was recognised. It works exceptionally well, but has a very poor side effect profile. Despite many years of study, we still have little idea as to how it works; identifying this mechanism remains a major research goal. However, improved analogues, such as risperidone, olanzapine and quetiapine, have become widely used. The latest developments in antipsychotics are the dopamine receptor partial agonists, the first of which, aripiprazole, does not cause Parkinsonism. ‘‘ dominant paradigm is one of incremental improvements in treatments In summary, common patterns of progress across the basic research, clinical research and product development domains provides a choice of effective therapies along with psychological interventions, from which one, or more can be selected to suit individual patients, as shown in Figure 1. The dominant paradigm is one of incremental improvements in benefit to risk ratios for new disease states and patient sub groups. Clinically, there remain significant cohorts of patients that are resistant to all current treatments, or which, once stabilised, relapse, or become resistant to them. Figure 2 summarises the complex relationships between clinical conditions, modes of action and therapeutic agents. Figure 1: Classes of psychotropic medicines and their modes of action Source: the authors. 1950 1960 1970 1980 1990 2000 2010 Barbiturates Benzodiazepines Tricyclic reuptake inhibitors Z-Drugs Selective Serotonin reuptake inhibitors Classical MAOI’s Chlorpromazine Reserpine Reversible MAOI’s Atypical Clozapine analogues Halperidol Aripiprazole ANXIETY DEPRESSION PSYCHOSES GABA A Agonists 5-HT + NA Antagonists 5-HT Antagonists Selective BD1 Antagonists Dopamine, D2 Antagonists Dual Dopamine, D2/5-HT2 Antagonists Dopamine, D2 Stabiliser? Eurohealth INTERNATIONAL Eurohealth incorporating Euro Observer — Vol.18 | No.4 | 2012 26 Innovation incentives Future investment will depend upon ‘technology push’ factors, technical regulatory standards and ‘market pull’ factors. Technology push factors There are new small molecule treatments for anxiety and depression, for psychoses and for bipolar disorders in phase II and III clinical development. However, if, due to poor prices most of these fail in EU markets, it appears likely that there will be an even sharper downturn in longer-term investment. Scope for further innovation exists in the following three areas: Variants of dopamine receptor partial agonists in schizophrenia and mania and modified reuptake blockers in depression could offer improved efficacy or tolerability, which are likely to improve patient outcomes through greater population uptake and sustained adherence to treatment. Such developments could reduce the adverse effects of nausea and sexual dysfunction. In anxiety, improving understanding of the role of the GABA-A receptor should lead to drugs with less sedating and amnestic effects. ‘‘ prices are being levelled down to those of the cheapest generics The discovery of neurotransmitters, which regulate ‘sleep-wake’ cycles by promoting arousal/awakefulness – the orexins – is leading to the invention of novel orexin antagonists as sleep-promoting agents. High levels of stress hormones, especially cortisol receptor (crf), corticotrophin and cortisol are found in many depressed people and new crf receptor antagonists targets are emerging for these disorders. A remarkable discovery has been that the anaesthetic ketamine produces a rapid elevation in mood in ‘treatment- refractory’ patients. Its mechanism of action may involve switching off memory circuits for bad memories in depression. We have known for many years that glutamate systems are dysregulated in the schizophrenic brain, but only recently have glutamate-acting drugs for schizophrenia become safe enough to use. The search for genetic or physiological biomarkers for psychiatric disorders has been on-going for many years. Brain imaging, particularly magnetic resonance imaging (MRI), has contributed much to our understanding of the brain regions involved in depression. Currently, there is great excitement that the brain changes responsible for the action of antidepressants can be observed in normal volunteers, providing a way of screening compounds at phase I clinical trials, allowing pruning out of candidates earlier, with major cost savings. 4 Several molecular and structural abnormalities have been reported for schizophrenia, but no diagnostic test or other clinical application has yet emerged. 5 European biomarker research may yield ‘diagnostic- therapeutic’ combinations for mood disorders. 6 Technical regulatory standards Future innovations in mood disorder medicines will depend critically upon whether less costly and time consuming approval pathways are feasible. Concerns regarding the wide variation in Member States’ approaches to valuing innovations has led to suggestions that the European Medicines Agency (EMA) should play a more prominent role at the outset by issuing with the product licence an EU assessment of the ‘relative efficacy’ of a new product, to improve the consistency of national cost-effectiveness assessments. Market pull factors Self evidently, there is a strong market pull effect from patients with mood disorders for better treatments, but the EU economic crisis has led to multiple cost saving interventions by health systems, through price cuts, sweeping away the hoped for transition to a more orderly, Health Technology Assessment (HTA) – based approach to pricing and reimbursement. Prices are being levelled down within countries close to those of the cheapest generics, upon which are superimposed cross-market price comparisons, which Figure 2: Relationships between, neurotransmitters, classes of medicines and disease states Source: the authors. ANXIETY PSYCHOSES DEPRESSION BIPOLAR DISORDERS Neuro- transmitters GABA A GABA B 5-HT1 5-HT2 Noradrena-line receptors α1-Adreno receptors Dopamine D1 Dopamine D2 Histamine H1/H2 Medicines Benzodiazepines Valium Librium SSRI’s Citalopram Fluoxetine Paroxetine Tricyclics Imipramine Amitriptyline MAIO’s SNRI’s Venlafaxine Halperidols Atypicals Clozapine Quietapine Olanzapine Risperidone Chlorpromazine Lithium Valproate Patient conditions GAD OCD Panic SAD PTSD Eurohealth INTERNATIONAL Eurohealth incorporating Euro Observer — Vol.18 | No.4 | 2012 27 now exploit the falling prices in poorer countries. In effect it is becoming a ‘race to the bottom’ for EU medicines prices across the EU Member States. Future European policies and regulation Across EU health systems there is a convergence of thinking on rewarding innovation around three precepts: • Does it address an area of high unmet medical need? • To what degree is it a therapeutic innovation? • Is it cost-effective today relative to current therapy at the price on offer? For severe mental illness drugs, exceptionally high uncertainties in predicting outcomes resulting from difficulties in making accurate diagnoses, patient relapses, non-adherence and non-responders makes it difficult to determine what are the areas of unmet need, but health systems are signalling to innovators, that only if they achieve step-change advances in therapy in areas of high unmet need will they be well rewarded. This is incompatible with an incremental innovation process. However it is the third consideration, cost-effectiveness, that heralds the most significant driver of change. Innovation is a continuous process and real world experience in clinical practice plus further product developments commonly transforms the potential value during the early years of a product’s market life. Comparative HTA methods can seriously disadvantage new medicines for mental illnesses, because building quantitative models, with high levels of indirect costs and uncertain patient responses, is exceptionally challenging. Innovators bringing forward incremental advances for anxiety, depression and schizophrenia must either concede that the product is derivative of an existing class and then justify a massive price uplift over the cost of existing generic therapies, or they have to persuade purchasers that it should be exempt from such clustering methods and negotiate a ‘managed entry’ contract. Across Europe, cheap generics have saved health care systems billions of euros, dramatically reducing revenues for innovative companies. Projections suggest globally a further decline in revenues of circa €23 – 31bn, which will only be partially offset by new products amounting to circa €15 – 23bn. Revenues may decline by as much as 27%, while only 13% of new product revenues may be generated from central nervous systems medicines. 7 Three factors are reducing investment in innovation; allowing generic competition from imported Indian and Chinese copy products, supporting EU Member State cost containment and lowering R&D productivity. For health care systems more cost savings will accrue from generics, but with greater risks of supply shortages. 8 Loss of some product development capabilities may increase exposure to resistant organisms, pandemics and new disease states. In mood disorders, valuable inventions will not be translated into useful products. The implications for EU competitiveness are likely to be an export of more manufacturing and services jobs to Asia due to the upsurge in generic sales. Competition from Asia and the USA for inward investment in innovative activities will intensify and EU biopharma sector employment could fall by 50 –100,000 jobs. Conclusions and recommendations Public health systems and industry business models are at a point of discontinuity. Health policies implicitly assume that if there are established treatments for diseases, such as anxiety and depression, this is synonymous with them having relatively low levels of unmet need. Popular rhetoric persists in naive distortions that new products are either true innovations of great value, or worthless me-too’s. When a broader view is taken of the economic, as well as clinical consequences of unmet need in mental illness in the working population, this is a faulty judgement. The full added value of innovative medicines can only be understood in retrospect. For example, the SSRI’s antidepressants have made, and will continue to make, an immense social and economic contribution, which dwarfs the cost of these drugs. ‘‘ more severe cost saving measures will seriously damage incentives for innovation The exciting new ‘push’ factors have the potential to drive a renaissance in mental disorder medicine innovation, but, if the advances now in late development are not reimbursed at reasonable prices, investment in further product development could dry up altogether by 2015, in a manner similar to that observed for antibiotics in the 1990s. There are three domains in which policy interventions might be made: 1. Invest more money in research to strengthen the ‘technology push’ 2. Lighten the regulatory burden in development by streamlining processes. 3. Protect innovators from yet more arbitrary price cutting initiatives A holistic view of all three of these is needed in formulating future policies. It is not enough to frame EU policies solely upon supply side factors. The EU Innovative Medicines Initiative (IMI) and collaborative ‘government- industry’ schemes are making a valuable contribution. The Orphan Drug programme has strengthened investment in drugs for rare diseases but the future burden of ‘relative efficacy’ assessments at the EU level and national cost-effectiveness assessments militate against faster, less costly pathways to market. Further ‘push’ incentives and streamlining of EMA processes alone will not reverse the decline in investment for Eurohealth INTERNATIONAL Eurohealth incorporating Euro Observer — Vol.18 | No.4 | 2012 28 mood disorders, in particular, without a more concerted pan-European initiative to address damaging demand side policies. Successful innovative industries are the key to restoring competitiveness and growth for Europe, but more severe cost saving measures will seriously damage the incentive for innovation investment and drive investment out of Europe to the USA and Asia. Máire Geoghegan- Quinn, EU Commissioner for Research, Innovation and Science recently emphasised 9 :- ‘All Member States are currently working to reduce their budget deficits and to keep public debt levels under control. While this process is necessary, it is critical that budget cuts be implemented in a way that supports sources of future growth’. The question has been posed, ‘Can Europe Afford Innovation’? 10 In the face of the escalating social and economic costs of mental disorders in Europe and the promising technological advances described here, we would conclude with the question, ‘Can Europe afford not to invest in, and reward well, innovation to improve the mental health of its citizens’? 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Innovation in the Pharmaceutical Sector: A study undertaken for the European Commission. London: Charles River Associates, 2004. Available at: http://ec.europa. eu/health/files/pharmacos/docs/doc2004/nov/ eu_pharma_innovation_25-11-04_en.pdf 8 Kotseki A. Pharmacies face seemingly endless medicines shortages, Greek Reporter, 7 June 2012. Available at: http://greece.greekreporter.com 9 Geoghegan-Quinn M. Promoting Innovation in an Age of Austerity: the European Dimension. In: Tilford S, Whyte P (eds.) Innovation – How Europe Can Take off. London: Centre for European Reform, 2011:43–48. 10 Cueni T. Can Europe afford innovation? Eurohealth 2008;14:8–10. New HiT for Kazakhstan By: A Katsaga, M Kulzhanov, M Karanikolos and B Rechel Copenhagen: World Health Organization 2012 (acting as the host organization for, and secretariat of, the European Observatory on Health Systems and Policies) Number of pages: 154, ISSN 1817-6127 Vol. 4 No. 4 Available online at: http://www.euro.who.int/__data/assets/ pdf_file/0007/161557/e96451.pdf Since becoming independent, Kazakhstan has undertaken major efforts in reforming its post-Soviet health system. Two comprehensive reform programmes were developed in the 2000s: the National Programme for Health Care Reform and Development 2005–2010 and the State Health Care Development Programme for 2011–2015 “Salamatty Kazakhstan”. Changes in health service provision included a reduction of the hospital sector and an increased emphasis on primary health care. However, inpatient facilities continue to consume the bulk of health financing. Partly resulting from changing perspectives on decentralisation, levels of pooling kept changing. After a spell of devolving health financing to the rayon level in 2000–2003, beginning in 2004 a new health financing system was set up that included pooling of funds at the oblast level, establishing the oblast health department as the single-payer of health services. Since 2010, resources for hospital services under the State Guaranteed Benefits Package have been pooled at the national level within the framework of implementing the Concept on the Unified National Health Care System. Kazakhstan Health system re view Vol. 14 No. 4 2012 Health Systems in T ransition Alexandr Katsaga • Maksut Kulzha nov Marina Karanikol os • Bernd Reche l Kazakhstan has also embarked on promoting evidence-based medicine and developing and introducing new clinical practice guidelines as well as facility-level quality improvements. However, key aspects of health system performance are still in dire need of improvement. One of the key challenges is regional inequities in health financing, health care utilisation and health outcomes, although some improvements have been achieved in recent years. Despite recent investments and reforms, however, population health has not yet improved substantially.